FXI and ASHR ETFs offer distinct opportunities for shorting Chinese stocks, with different costs and dynamics. Understanding the H/A spread is crucial for investment decisions.

The A Shares can only be bought by local investors with no shorting. The H shares can be bought and shorted by foreigners.

There is good data on H-share shorts but no data on the A.

There is the FXI ETF on H shares and the ASHR ETF on A shares.

The FXI short position decreases on the way up as bullish investors follow momentum up and down. The ASHR position does not show this pattern.

Shorting China with either the ASHR or FXI means gaining exposure to the H/A spread.

The ASHR is expensive to short, 3.83%. FXI is normal borrow. This makes sense as the ASHRs are impossible to short and the A’s trade at a premium to the H.

The ratio of FXI to ASH short position went from to 12 when FXI rallied 15%.

FXI ASHR and HSI all have similar short graphs although the scale is different.

HSI and FXI are highly correlated.

The FXI and ASHR provide varying opportunities and challenges for shorting Chinese equities. Understanding the relationship between these ETFs is key for optimal positioning.

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